Detroit should have gone "cold turkey"

[Willi]

It promotes discussion, providing a catalyst upon which "other" ideas can be hashed out.
I don't care if you love or hate the journalist, think its old or new news, etc.
Something to get people thinking, take a side, discuss an angle etc.
Nothing is entirely all good or all bad, it has elements of each in various quantities.

[Dumpling]

I am like, where to even begin on this one....but Willi, I thank you for posting it,
because it gives much insight into the workplace changes that the wastewater
treatment plant is currently experiencing in the transition to GLWA.
Where to begin.
Let's try....
I don't have his exact quote handy but entrepreneur Andy Grove of Intel noted that
doing tech startups is harder now because capital requirements tend to be higher than
in earlier eras. In a related note, this forum had a poster, namely michimoby, who
complained that other parts of the country were more generous with startup capital than southeast Michigan.

[mwilbert]

Not a well-thought out article. Other people have made many appropriate critiques, especially of the conflation of the City of Detroit, metro Detroit, and the auto industry, but I'll add a few.

1) Most US Japanese car factories are not in California.

2) If they were, it wouldn't be much support for his argument, as California is a union, high-cost state, and in fact Toyota's first plant in the US was the joint plant with GM that did have a UAW workforce. They could have built that in Michigan without any actual difference in labor arrangements, but they didn't.

3) If foreign automakers had decided to locate in Michigan, they wouldn't have located in Detroit, simply because it would have been almost impossible to assemble an appropriate site--recall how hard it was to put together the Poletown site. It might have been nice to have these facilities in Michigan, but they wouldn't have done much for the city or its finances.

4) The idea that Detroit will have any problem finding people to lend to it post-bankruptcy flies in the face of history. The actual problem is that the city is still probably not going to have enough surplus revenue after basic operating expenses to afford much new debt.

The general points that bankruptcy won't make everything better and that the city's old ways of doing business needs to change are correct but also pretty obvious to anyone who has paid any attention to the situation.

[Dumpling]

In recent years prior to the city bankruptcy various contractors for the water department
experienced revenue lags. One lag was when there would be months-long delays in being
paid whilst the City of Detroit gathered financing together and made payroll very consistently.
Another lag would sometimes occur when projects needed to be signed off on by City Council.

[Wesley Mouch]

This article is pure rubbish. More promotion of race-to-the-bottom, low-wage, anti-unionism.
Even a point the author celebrates--the location of Saturn in Spring Hill, TN--is no more. Such a terrific idea to be in a low-wage state, that GM found it wholly unnecessary. And Ford was *never* headquartered in the City of Detroit--is that because the UAW was too powerful in the early 20th century? LOL.

Agreed that the author conflates "Detroit", as in the auto industry, with the City of Detroit. That his juvenile analysis makes this glaring mistake results in nothing but confusion and hysteria for the rest of the piece. It's hard to take this guy seriously when he confuses correlation with causation...there simply isn't any evidence to support his opinion.

GP, a rare moment where I agree with you. Unionism was not Detroit's biggest problem. [[A negative to investment, to be sure, but hardly the reason.) The resistance to change by labor was outdone by the resistance to change by management. Labor only build the Pinto. Management designed it.

[Dumpling]

Another set of contractor revenue lags was precipitated directly by union anti-contractor
activism. To wit: the delay of the Minergy and Synagro sludge solids handling contracts.
But the Nefco contract is now going forward, and this nearly finished sludge drying facility will be privately operated. With the GLWA in place the City Council will be no longer a factor blocking contractor revenue. Therefore metro Detroit is thereby that much more business friendly.

[Dumpling]

Old-timers on this forum will recall that in the Democratic primary that chose
Granholm to be governor, she had two opponents. These were Blanchard and
Bonior. Detroit proper went for Blanchard as opposed to Granholm based on his
history of having rescued Chrysler, and in my best recollection there was government
assistance for that one. Citizens of Detroit proper at that time were fully aware
of the city's economic challenges.

[ghettopalmetto]

GP, a rare moment where I agree with you. Unionism was not Detroit's biggest problem. [[A negative to investment, to be sure, but hardly the reason.) The resistance to change by labor was outdone by the resistance to change by management. Labor only build the Pinto. Management designed it.

Sure, the Big Three had quality issues in the 1970s and into the 1990s. Sure, they were slow to adapt to smaller, more fuel-efficient cars in the 1980s, when the Japanese companies exploded in the U.S. These were institutional [[i.e. management) failures, with organizations unwilling or unable to respond.

As we saw with the GM bankruptcy, the largest problem has been one of enormous legacy costs--pensions and benefits. This is interesting because automakers in Japan, Germany, and elsewhere don't have to contend with these costs; pensions and benefits are provided by the state in those countries. So what we have is a cost burden that is unique to EVERY industry in the United States. It's not a union problem or a Detroit problem or a GM problem as much as it is an American problem. As far as competitiveness goes, we've started the race by cutting off both our feet. That we as a nation are competitive at all is a testament to the productivity of our workers.

[Eber Brock Ward]

I think it's worth distinguishing between private and public sector unions.

If a private sector union overplays its hand, then you get an American Axle relocation and they lose out. If a public sector union overplays its hand, you get the City of Detroit, where the retirees are still getting quite a bit. You can't just relocate a municipality, or shut it down.

[ghettopalmetto]

I think it's worth distinguishing between private and public sector unions.

If a private sector union overplays its hand, then you get an American Axle relocation and they lose out. If a public sector union overplays its hand, you get the City of Detroit, where the retirees are still getting quite a bit. You can't just relocate a municipality, or shut it down.

It's expensive to relocate, especially for a manufacturing concern. It's expensive to recruit and train workers. I think the threat of unions "overplaying" their hand is overblown. And the reason is simple: A union is a contractual arrangement between workers and management of a company. It works in two directions. A union can make a demand, but the company can always say "No", or negotiate a different position, and vice-versa. Relocation would be the absolute last move. Anyone who up and runs away because someone put too much pressure on him, isn't much of a businessman.

Now, if you want to see companies relocate, go to a "business-friendly" right-to-work state, and watch what happens when a company's generous tax subsidies expire.

[bailey]

This article is pure rubbish. More promotion of race-to-the-bottom, low-wage, anti-unionism.
Even a point the author celebrates--the location of Saturn in Spring Hill, TN--is no more. Such a terrific idea to be in a low-wage state, that GM found it wholly unnecessary. And Ford was *never* headquartered in the City of Detroit--is that because the UAW was too powerful in the early 20th century? LOL.

Agreed that the author conflates "Detroit", as in the auto industry, with the City of Detroit. That his juvenile analysis makes this glaring mistake results in nothing but confusion and hysteria for the rest of the piece. It's hard to take this guy seriously when he confuses correlation with causation...there simply isn't any evidence to support his opinion.

Spring Hill and Saturn are no more because the UAW killed it...and GM stood by and allowed it. It was actually a success and bit culty, but the UAW [[Yokich specifically) could not abide the special agreement that had "technicians" [[instead of rigidly defined jobs), collaborative vs combative Management/union relationships, profit-sharing, the elimination of work rules, and the flexible factory shifts that improved Saturn's efficiency. His entire time as president was focused on quarantining the Saturn experiment and drowning it in its bathtub before those ideas spread to other facilities. GM of course is an accomplice because they capitulated and allowed Saturn to die on the vine, but still, it did work and the employees were on board with it and it could have revolutionized the industry [[or at least GM) ...but small men pushed petty retrograde agendas and killed it.

[ghettopalmetto]

Spring Hill and Saturn are no more because the UAW killed it...and GM stood by and allowed it. It was actually a success and bit culty, but the UAW [[Yokich specifically) could not abide the special agreement that had "technicians" [[instead of rigidly defined jobs), collaborative vs combative Management/union relationships, profit-sharing, the elimination of work rules, and the flexible factory shifts that improved Saturn's efficiency. His entire time as president was focused on quarantining the Saturn experiment and drowning it in its bathtub before those ideas spread to other facilities. GM of course is an accomplice because they capitulated and allowed Saturn to die on the vine, but still, it did work and the employees were on board with it and it could have revolutionized the industry [[or at least GM) ...but small men pushed petty retrograde agendas and killed it.

So let me see if I understand. The UAW can unilaterally do whatever it wants, and the President, CEO, COO, Board of Directors, and Shareholders don't have any say in the matter? BS.

Methinks you're leaving out half the story to push an agenda.

[Wesley Mouch]

ions

I think it's worth distinguishing between private and public sector unions.

If a private sector union overplays its hand, then you get an American Axle relocation and they lose out. If a public sector union overplays its hand, you get the City of Detroit, where the retirees are still getting quite a bit. You can't just relocate a municipality, or shut it down.

Public sector unions also have a say in who sits across the table from them. Union members vote. Union members contribute to political speech through campaigns and political participation.

[bailey]

So let me see if I understand. The UAW can unilaterally do whatever it wants, and the President, CEO, COO, Board of Directors, and Shareholders don't have any say in the matter? BS.

Methinks you're leaving out half the story to push an agenda.

Look, youthinks whatever the fuck you want. In the post, I repeatedly noted GM's unclean hands in both capitulating to Yokich and allowing Saturn to die on the vine. However, without Yokich making it job one to kill Saturn's "Special Agreement" GM might have been able to make other decisions with Saturn and GM-wide.

I'd also lump in the GM dealers in that pot of stupid as they were not too keen on Saturn's whole "no haggle" pricing either.

Basically Roger Smith et al. actually had a good idea, Saturn initially was a good product and had a lot of buy in from both the worker and the consumer and then it was colossally fucked up by GM internecine fighting and product cannibalization & UAW anti-innovation intransigence.

Saturn's raison d'etre was to be "a different kind of company"... once the UAW made sure that was never going to happen, it was pointless to continue it because there were plenty of old guard in GM that didn't want to see it succeed either.

[jackie5275]

ionsPublic sector unions also have a say in who sits across the table from them. Union members vote. Union members contribute to political speech through campaigns and political participation.

The public employee unions can support a candidate, but that doesn't mean they get who they want at the table. The candidate has to win first. Plus, even if their candidate does win, that now elected person doesn't always help the union.

[Wesley Mouch]

So let me see if I understand. The UAW can unilaterally do whatever it wants, and the President, CEO, COO, Board of Directors, and Shareholders don't have any say in the matter? BS.

Methinks you're leaving out half the story to push an agenda.

Its not so clear cut, but the BOA and shareholders do have limited say in unionized workplaces. They are constrained in their management by the CBA, and the legal requirement to 'bargain in good faith'. 'Good Faith' sounds honorable, but in practice it pretty much means that rollbacks and changes in working conditions only occur in favor of management in very difficult times. Otherwise, union rules are agreed to, one by one -- and management, the BOD, and shareholders have no say in the matter.

The system works well in a profitable environment, and a stable environment. It was designed when the Big 3 were money machines and changes on the floor were minor. But when you introduce automation and real competition [[Japanese, et. al), the unionized workplace doesn't respond well.

Let's say you buy a printing press that needs 2 men instead of 12. How many years will it take for the union contract to adjust to this new reality -- the reality of your upstart competition.

So you just have to keep plowing along, getting less and less profitable. Yet you must bargain in 'good faith' -- which means basically starting from where you are, not where you need to be to make money.

Unions in the US are a broken system. They are needed, but the whole world isn't the 1950s auto plant anymore. Laws do need to be modernized as part of a broad re-tooling of our business climate. Tax laws, labor laws, accounting rules. We are shooting ourselves in the foot.

I've really tried hard here not to paint this as a 'union busting' post. I don't think we need to get rid of unions. Just adjust to the modern world.

But where it comes to cities -- the point of this thread... there we do really need major reform. Workers do need some civil service protection. But the way we're doing it is obviously unsustainable, and unfair.

[anonJD]

I completely agree with the sentiment of that article.

Unless you're making good money at the Big 3 and nearing retirement, or unless you graduate from one of Michigan's universities with a high GPA and a STEM degree, it's best to get out of Detroit and Michigan right now. Its best days are behind it.

It reminds me of a headline in U. of Michigan's humor newspaper: "We Need to Revialize Detroit," says student taking job in New York City

The top students at U. of Michigan and to a lesser degree, MSU, are being rushed by companies in California, DC, New York, Chicago and down South. You do the pros and cons of these sexy locations to Detroit and Detroit loses every time. The kids in the bottom half of their classes and the kids without the means to flee are largely the ones sticking in Michigan. That is not a promising outlook.

And you're right about those nearing retirement. Once they do retire, they're fleeing to Florida or Arizona and the kids ain't coming back. Detroit's future is very bleak unless something REALLY drastic happens to spark growth. It can not compete with Chicago. Period. And it's decades away from competing with Pittsburgh, which took 30 years to make a come back.

[Willi]

I'll come out and say bluntly - Unions are not needed in any way shape or form - today.

Enforce the laws on the books for respectful business operations and all will be fine.
People can and do make a great wage, with decent benefits, in this country.
The scummy business operators can be fined heavily, driven out of business, and disappear.

Time for the pendulum to hang neutral, let business re-set, and evolve forward into 2020 +

[ghettopalmetto]

I'll come out and say bluntly - Unions are not needed in any way shape or form - today.

Enforce the laws on the books for respectful business operations and all will be fine.

People can and do make a great wage, with decent benefits, in this country.
The scummy business operators can be fined heavily, driven out of business, and disappear.

Yeah, like the electricians in Alabama who make $8 an hour [[R.S. Means Construction Cost Data). Or the people who are forced to work at Walmart, because Walmart done gone and forced all the local businesses out of existence. Or the folks who get shitcanned after a Mitt Romney takeover, so he can squeeze every last penny out of a company, before putting it out of its misery. Nope, we don't need no dang stinking unions!

But hey, platitudes are wonderful too.

I mean, you might be just happy working for sharecropper wages. But that's no reason to force your 19th Century Utopia on the rest of us.

[BankruptcyGuy]

It reminds me of a headline in U. of Michigan's humor newspaper: "We Need to Revialize Detroit," says student taking job in New York City

The top students at U. of Michigan and to a lesser degree, MSU, are being rushed by companies in California, DC, New York, Chicago and down South. You do the pros and cons of these sexy locations to Detroit and Detroit loses every time. The kids in the bottom half of their classes and the kids without the means to flee are largely the ones sticking in Michigan. That is not a promising outlook.

And you're right about those nearing retirement. Once they do retire, they're fleeing to Florida or Arizona and the kids ain't coming back. Detroit's future is very bleak unless something REALLY drastic happens to spark growth. It can not compete with Chicago. Period. And it's decades away from competing with Pittsburgh, which took 30 years to make a come back.

As the kids say, "not sure if serious."

The "kids" who move to Florida to follow their retiring parents [[who's ever heard of such a thing?) probably realize that paying teachers $25,000 per year doesn't result in the best education for their children. Pittsburgh? Let's just say I guess we'll see about that.

As I've mentioned, 19 of the nation's largest cities would have lost population if it wasn't for first generation immigrants. That includes Chicago, Los Angeles and New York.

Young people follow jobs, period. It's not the "sexiness" of the city, and it never has been. Richard Florida made that argument to Jennifer Granholm [[remember Cool Cities?). It was wrong then, and it's wrong now.

Detroit is in revival because of the relocation of white collar jobs to the City's core. When CA and IL recognize their pension problem, it will result in either massive tax increases or reductions in services, just like what happened to Detroit 20 years ago. And employers have and will leave, just like 20 years ago.

What happens next is what's important. Does Detroit continue its momentum, or do we reverse field and impose job-killing policies that existed in the past?

The future is as bright as it's been in Detroit in 50 years. Anyone who can see that is too busy reading epitaphs in national magazines.

[Dumpling]

To be sure, horseshoer notwithstanding, the WWTP at times has customs and tradition
that hearken from another era, including union traditions. [[I am sorry to go away from
exciting new startups to revitalize the city and employ the very finest university
graduates). As we transition to a new GLWA here is a starting point for considering
what museum union stuff to keep from that other era:

http://detroit.cbslocal.com/2014/10/...outs-reported/

[Dumpling]

Since all's well that ends well and there are no pending lawsuits from the spillage
I can just make some useful comments in friendly spirits and in hopes that nothing like
this happens in Detroit ever again. What seems to have happened [[I didn't know
the word "turnbuckle" before this article) is that the turnbuckle corroded from the loads
being carried by the truck. At the WWTP lime is mixed into the sewage sludge to bring
its pH above 12. This kills hazardous microorganisms in the sludge and makes it more
suitable for agriculture. The sludge also has a very, very, very, slippery polymer in it.

[anonJD]

1.) Young people follow jobs, period. It's not the "sexiness" of the city, and it never has been.

2.) When CA and IL recognize their pension problem, it will result in either massive tax increases or reductions in services, just like what happened to Detroit 20 years ago. And employers have and will leave, just like 20 years ago.

1) Wrong, period.

2) Chicago is freaking BOOMING. Construction around the loop is insane. You keep holding your breath for this pension problem to blow it up though.

3) Pittsburgh is exponentially healthier than Detroit right now, in case you didn't know.

[Willi]

I know people take the train to Chicago to have fun for a weekend.
Not so sure the folks from Chicago are taking the train into Detroit and walking around much.

[313WX]

I know people take the train to Chicago to have fun for a weekend.
Not so sure the folks from Chicago are taking the train into Detroit and walking around much.

They did at one point in time, back in the 1930s through 1950s [[when Detroit was spoken in the same breath as NYC and Chicago). Of course, that was when Detroit had an extensive street car system to compliment its heavy passenger rail lines.

Part of Detroit's problem is that its train station [[Michigan Central) was placed so far away from the actual CBD, whereas Chicago's train station was right in the heart of its CBD. Once they got rid of the street cars, it became much more of a chore to ride the train into the city [[Detroit) and get around.